Bait and switch


A couple of days ago, I read a post with the comment Monzo, the bait and switch bank. At the time I didn’t think much of the comment.

But now I’m wondering about it…

There was a massive furore around the introduction of charges, for foreign ATM use, and this upset many people who thought they’d signed up for a foreign-use fee-free card.

Recently there’s an announcement that some of the core functionality, the top-up, of the prepay card costs Monzo a lot of money and, whilst it has been reintroduced on the current account, there is now the prospect of charges for this functionality, also.

And, of course, many thought they were getting a prepay card with a specific purpose and did not know of the planned current account which they don’t want.

Monzo has enjoyed great publicity through the press and word-of-mouth. It’s grown to around 450,000 customers before the roll-out of the current account. Their customer service seems good, they use emoji, the card colour is unusual for a bank. They’re not like other banks.

Was this just one massive exercise in numbers to get customers for the current account? How is Monzo going to be profitable? It seems the costs they’ve incurred have taken them by surprise. Is Monzo a bait and switch operation? Is the gloss wearing off for many customers?

(Danny) #2

Not for me, I don’t use top-up’s so I don’t care about the charge.

Foreign travel charges, I don’t use cash and if I do so be it so again I don’t care.

I use Monzo as my main account, my wages go in and DD’s go out like Metrobank

People crying about charges should look at legacy banks, I don’t see them offering top up like Monzo (haven’t looks tbh).

No one is forcing them to use Monzo tbh, let them stick to their boring stuffy old legacy banks if they don’t like it


Personally I do not think they are intentionally a bait and switch operation however to some they may appear that way.

Good business is to preempt potential costs and work out in advance how they will be met.

Were fees for, Topups, ATM use etc introduced from day one there would not be these thoughts.

However, be it down to oversight or poor business judgement, introducing these charges further down the road does naturally incurr bait and switch comments

(Sufi) #4

I think it’s would be unfair to say this because being transparent is not easy and Monzo are trying their best be transparent and tell us things which we would have never known from an old high street bank. Monzo needs to become stable and viable organisation to for all of us, it’s customers. They do somethings which we don’t agree but more often they do things differently and in a transparent way. I would not say they influenced me in any way with the things you mentioned in your post but I know I knew what they are trying to build and many signed up not knowing what Monzo stand for and what they are going to be in future so I can understand some confusion.
Monzo had some promotions which didn’t help the brand but brought in loads of new customers.

(Tommy Long) #5

I think the concept of “good business” is pretty subjective… pretty much all of the world’s largest companies have operated at a loss at first and have withdrawn/charged for some features when they’re proven to not make sense

(Daniel White) #6

I think it may seem a bit Bait and Switch at times but I definitely prefer the upfront and honest approach regarding the fees. I know exactly what I’m paying for and why I’m paying for it.

There are a few people saying “well just charge x per month”, I personally don’t want to have to pay to subsidise people who can afford to go on holiday abroad several times a month or the top-up feature I’ll never use, but happy to pay for an overdraft if I need it.

I think that we need to remember is this is still better than a legacy bank, who will charge a lot more for the same feature. Foreign ATM transactions, for example, with higher fees and no free limit are raking it in compared to Monzo. Santander would bill me £1.99 (or 1.5% whichever is higher) and a 2.75% Currency Conversion fee and using whatever inflated rates they are using. Monzo’s fees are easy to work out and understand and are still lower. Monzo are still not charging for foreign card usage, whereas Santander charge 2.75% plus £1.25 per transaction allowing them to double-dip on those charges and the interchange fee!

Santander will charge me for a failed DD, I don’t beleive Monzo do. Legacy banks tend to hide fees for some things inside other things, or hide it in a monthly account fee.

I think people have got so used to things being this way that they don’t realise that just paying for what you use is surely better?

(Richard Bairwell) #7

I think the problem is that quite a few people were attracted to Monzo for the wrong reason (i.e. MSE promoting it as a fee-free prepaid international card) instead of being a “New Bank who is going to be launching a current account and just offering a test product for now”.

(Tristan Thomas) #8

It most definitely wasn’t! We (I hope) were always clear that it was a Beta and we wanted feedback from people to help us build the best current account in the world. We learnt a lot thanks to the feedback (and also on eg. costs) that mean we can now build the product we always wanted to build and hopefully it appeals to an even larger number of people :slight_smile:


I think I’m mostly with @Johnny and @MIROW on this one. It’s either bait and switch, or just really poor planning, or a mix of both. I think anyone could’ve figured out from the very beginning that free unlimited withdrawals abroad are too expensive in the long term. The same applies to debit card topups really: It’s no surprise to anyone that debit card payments are more expensive than receiving bank transfers.

Maybe you find the term “bait and switch” offensive, and therefore don’t want to use it in regards to Monzo, but I can only see two possible reasons for introducing these two features, and then withdrawing them later:

  1. Either they just didn’t do the math properly at first (which I think is poor planning), or
  2. They thought “Yes, sure, we can’t keep doing this forever, but we can for an introductory period, so lets just start with this, and come back to it later.”

(Personally, I did fully expect both unlimited foreign withdrawals and debit card top ups to go eventually, even before they announced it, because I suspected that these features - without charging for other bits - were not affordable in the long term. The thing is, of course, that the topups were crucial for the prepaid as no acc no / sort codes were possible for the individual users, but who has ever been able to transfer money into their bank account using a debit card?)

For me (but I have said that for a while) Monzo as it currently stands has little appeal: It offers very little that other banks don’t offer (instant notifications, interestingly coloured debit card, emojis) but it’s just lacking too many core features that I require for my banking (cheque pay ins, paper statements, SEPA transfers, non-mobile interface are the biggest for me personally [edit: Let’s try not to discuss my particular issues here. They have been discussed exhaustively elswhere. I just wanted to illustrate why I personally have come to this conclusion]). Once it has caught up with the major banking capabilities I might come back to using it more regularly, but at the moment it’s really not there yet (in my opinion! I’m sure others have other needs for their banking and Monzo is perfect for them!)

(MikeF) #10

Yeah, it’s interesting. Part of me wants to argue with you but my needs are just different to yours.

I look at your last paragraph and think I’ve -

  • had one cheque to pay in this year so posting it wouldn’t be a hassle
  • not had a paper statement in 10 years (not even for mortgage application I think)
  • don’t know what SEPA is
  • haven’t used a bank on a non-mobile for at least 5 years (except web interface on ipad when app doesn’t do everything)

All of those things that are important to you are almost irrelevant to me :thinking:
(I also don’t travel aroad extensively on personal business and won’t need to top up with a debit card)

(Peter Roberts) #11

None of this is unusual and unexpected for a VC funded startup - they have to pivot to profitability at some point. My view on it is not that Monzo has to be a “perfect” bank it just has to be better than what we have right now. I think they’re still realistically on track to do that and do it pretty well at that!


Fair enough :slight_smile:

SEPA is basically EUR denominated transfers within the EU and EFTA. Used widely in the EU, from where I receive multiple transfers a year, so this is quite simply a must have for me personally (but I appreciate that I will be a minority in the UK)


Tristan, I’m not sure that message was conveyed by MSE?

I think that many (not all) of Monzo’s customers who are engaged on this community are aware of, and understand, the journey.

My wife, for example, has Monzo Prepaid. She has no idea what you are doing. I have just over a dozen colleagues who thought they were getting a fee-free prepaid card and that’s exactly how they’ve used it.

For those who are uninterested in FinTech (I suspect the vast majority of the 450,000 Prepaid), I can understand the confusion and a sense of bait and switch.

I’m not implying this was Monzo’s intention. As @mirow says, that’s a potential perception. It has been worrying me, of late, the posts from Monzo staff talking about costs and how Monzo is to make money. :thinking: …and I’m not even an investor. :hushed:

I like Monzo but I wonder if it’s starting to lose its shine?

(Danny) #14

This all over!

Can’t remember the last time i had a cheque, when I was given one I refused and said bank transfer

Paper statements, what year are we in 1996? Download to PDF then print simples (when/if it comes)

I use Mobile/Web for Metro as they are Jank

As I said before, don’t like… well them legacy’s are 10 miles behind you…


Sorry mate. I didn’t want to start an argument about these particular items! They have been exhaustively debated elsewhere. They were just to illustrate my point.

(Danny) #16

Yeah I know, I was just agreeing with Mike… wasn’t a dig at you :slight_smile:


SEPA is actually a payment system, what you refer to as SEPA is actually a SEPA Credit Transfer or SCT. There is also a SEPA Direct Debit or SDD (which is the SEPA equuvalent of a BACS Direct Debit or DD)

(Jolin) #18

I think one thing to remember about the fees being added is something that was restated in the recent blog post:

We started the Monzo Alpha back in 2015 thinking that a few thousand people would help us test and improve the product, before we were able to launch full bank accounts. Our goal has always been to build the best account in the world and we’re so excited to start focussing all our efforts on doing that :rocket:

The idea of the prepaid card was that it would be a test with a (relatively) small number of users. Then the ‘proper’ offer would be launched in the form of the current account. So features on the prepaid card shouldn’t necessarily have been expected to follow through. Things would be added and removed based on experience.

Obviously this hasn’t quite happened, as the prepaid card was a lot more popular than expected. But it is still a drop in the ocean compared with what Monzo’s aiming for, so better for them to be upfront now and disappoint some early testers, than have the wrong model for the future.

On a related note, banks often adjust their fees as business plans and the market changes. I don’t think we should expect anything to be forever. At least there is some visibility and customer consultation with Monzo.

(Gareth) #19

Beta doesn’t translate well to mean beta pricing though, unless it’s specifically stated.

(Patrick) #20

I don’t really understand why the top-up option has been reinstated. I don’t know of any other bank that lets you pay in by charging the debit card of another bank - why would they? If the Monzo account is your bank account then why would you be charging another card to put money into it?

I understand it’s necessity for the pre-paid, but surely it’s more of a non-essential bonus feature as far as the current account goes?